Investor optimism rises despite mixed economic outlook

INVESTOR optimism about the global economy has leapt to its highest level in nearly six years as asset managers pile their cash back into the equity markets.<br /><br />According to the Merrill Lynch fund managers survey for August, 75 per cent of respondents believe the world economy will strengthen in the coming 12 months &ndash; the highest reading since November 2003 and up from 63 per cent in July. Confidence about corporate health is at its highest since January 2004.<br /><br />A net 70 per cent of the panel respondents expect global corporate profits to rise in the coming year, up from 51 per cent last month.<br /><br />The news comes as mixed economic data in Britain continues to divide opinion about the recovery.<br /><br />According to the Confederation of British Industry (CBI), manufacturing orders fell slightly more than expected in August but firms were less gloomy about their future production than at any time in the last year.<br /><br />The CBI&rsquo;s industrial trends survey showed the order book balance rose to -54 from -59 in July. Analysts had forecast a reading of -50.<br /><br />But the output expectations balance rose to -5 from -14 in July &ndash; the least negative since June 2008 perhaps because the stocks of finished goods balance fell to +13 from +20 &ndash; the lowest since July 2008.<br /><br />&ldquo;It looks like destocking in the manufacturing sector may be coming to an end which offers a further sign that the UK economy is starting to stabilise,&rdquo; said Richard Lambert, CBI director general.